How to Avoid Bad Hires Through Reference-Checking

Through this session, you will learn how technology has introduced a way for talent acquisition professionals to capture behavioral feedback from five references in just two days for each job candidate, and how to avoid candidates who score low with references.

Transcript of "How to Avoid Bad Hires Through Reference-Checking"

1.
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6.
Revolutionized Assessments for Business
How to Avoid Bad Hires through
Reference Checking
SkillSurvey Pre-Hire 360™

7.
The History of a Reference Check
• Historically
– One of the most important steps
– Hiring managers talked to previous managers
• How are they day to day?
• Nuances?
• What challenges do they have and what can I do to make them A+ players?
• Actionable Information
– Will it help make a decision?
– Will it screen out or have candidate rise to the top?
– Will this information help this person succeed?
– Will this information predict behavior?

12.
The Lawyers Get Involved
• The 1990’s and the new millennium
– Legal issues arise
– HR cracks down and bans reference checking
• What are the options?
– Stop doing it?
• If you do attempt to check references:
• Countless hours of phone mail tag, email tag, phone mail tag
• Weeks and weeks of time
– All for no actionable information

13.
• Bad Hire has an impact
• Various by organization and by job role
– Hard dollar cost – base salary, benefits, on board training, exit costs
– Internal team turmoil
– Customer satisfaction
– Compliance (Finance – SOX issues and the Fed’s)
• For sales roles
– Cost of lost revenue
– Asset is time – time is lost forever
• For clinical roles
– HCAHPS and reimbursements
Impact of a Bad Hire

14.
Dependable Employees
Absenteeism is a chronic problem among U.S. retail employers
• Conservatively costs $3,600 per hourly employee per year and $2,650 per salaried employee
per year
• A company with 5,000 hourly employees has the potential to reduce costs by over $7.9 million
per year (3.2% of total payroll)
• Results in lost productivity, high-cost replacement workers, and excess staffing
Results in reduced
ability to meet demand
leading to dissatisfied
customers

20.
The D’s and F’s
We all know
someone like this
Who hired
this guy?
Are you
kidding me?
- Not a team player
- Gives 70% at best
- Terrible with customers

21.
The Hard Cost of Bad Hire – Real ROI
The U.S. Department of Labor currently estimates
that the average cost of a bad hiring decision can
equal 30% of the individual’s first-year potential
earnings. That means a single bad hire with an
annual income of $50,000 can equal a potential
$15,000 loss for the employer.
Question for the attendees:
Can you think of one person your team hired recently where you made a
mistake? Hiring manager override gone bad?
Example – RN $60,000 x .3 = $18,000

22.
• Finding the B’s and C’s
• Seems to be many in pool
• The interview:
– Seemed ok, better than most
– Something nagging
– ….3 months later – C – player
– I knew it
The B’s and C’s
"I noticed that the dynamic range
between what an average person
could accomplish and what the best
person could accomplish was 50 or 100
to 1. Given that, you're well advised to
go after the cream of the cream. ...A
small team of A+ players can run
circles around a giant team of B and C
players.“ --- Steve Jobs

25.
B Player is Singled Out and Hired
B Player is Chosen
• Some gaps
• No show stopper issues
• Onboarding plan
• Know the issues before
day 1

26.
Less than one minute
85% Response Rate
Confidential Reference
Feedback
Two Days or Less
Identify
Avoid
Validate
Skeptical?

27.
The Real Cost of Bad Hire – Cream of the Cream
• Hiring for Mediocrity
• Driving to the A player on every candidate
• Cost of B’s and C’s
– HCAHPS
– Customer Satisfaction
– Sales
– Avis – we try hard to be the best (#1)
• Must focus on the A’s
• Identify those who can be B+ players

28.
What is the Problem?
• Most candidates do a nice job presenting themselves during
interviews
– All are team players
– All show up for work and don’t text, sit on Facebook all day
– Most are ethical and always do the right thing
• Most candidates are well rehearsed in the question/response mode
– Books, job seeker sites
– Experience interviewing all the time
• Your only view today is from the candidate’s perspective
– Really need a true 360 review from those who saw the behavior in the past

41.
Increase Compliance and Consistency
• It is all about the science - Validity of survey questions
– Do the questions validate what you are actually asking?
– Do the questions help predict future behavior?
– Are the questions being asked in a way that reduces risk?
• Sample question – What high school did you go to?
• SkillSurvey reference feedback shows no differences
between sub-groups
– Helps support your efforts to remain EEOC and OFCCP
compliant
• Standardized process

52.
From: org name Recruiting
Sent: Thursday, November 06, 2008 12:57 PM
To: Patrick T
Subject: org name Selection Process Information
Dear Patrick T,
Thank you for your continued interest in the Major Account Sales position with org name. As already
explained to you, a critical step in the selection process is reference checking. org name uses web-based
reference checking for this purpose.
Please click on the link below. It will open a web page where you will input your reference. You will also
be able to review a sample of the questions being asked and the email that will be sent to your
references. Your references will be emailed a reference survey and their responses will be submitted
directly back to SkillSurvey. No one will see your references' individual responses because all responses
are electronically aggregated together to produce one summary report.
Note that all references will be responding as individuals, not as representatives of any company or
organization.
Please click on the following link (URL) to begin: http://eref.skillsurvey.com//CandidateUtilities/EOC.aspx?
Step 2: Candidate Enters References
Automated Email From
Recruiter to Candidate
Explaining the Process

53.
Step 2c: Candidate Confirms References and Signs Legal Waiver
Proof of Consent
“…I hereby release any such
person, their company, and any
affiliated officers, directors,
agents, and employees from any
and all claims I may have arising
out of the disclosure of such
information…”